03 Jan Episode #306: Josh Wheeler, Texas Family Fitness, CEO
Pete Moore: This is Pete Moore, halo talks NYC on location, Dallas, Texas, with a good friend of mine for many years. Seasoned operator varsity athlete. <Laugh> Texas family fitness, Joshua Wheeler, the first
Josh Wheeler: Hi Pete, how are it’s? Good to be here.
Pete Moore:
Awesome. So let’s go back to our gold gym days and give us your how you got into this industry, how you’ve been like the chief revenue guy, PT guy, optimizing clubs, and now finally, you know, have your own CEO role.
Josh Wheeler: Yeah, fantastic. Well going way back to my junior high days, I saw the movie pumping iron gold gym fell in love with the brand, fell in, love the industry and told my parents I wanted to own my own gym and had the opportunity to start at the front desk at gold Jim and CLMA Oregon when Jean Lamont had three gyms and that’s where it all started. And Jean Lamont
Pete Moore: Went legend to the legend gold
Josh Wheeler: Gym network. Yes, sir. Great mentor of mine. And so 33 years later here, I am CEO at Texas family fitness.
Pete Moore: So talk about, you know, being inside the golds gym franchise network, talk about, you know, what you did there and, you know, really understanding the unit economics, understanding psychology member and you know, how all the levers work, you know, inside operating a club. Yeah.
Josh Wheeler: So I had the opportunity to a partner with a gentleman by the name of Steve Appleton, who was the CEO of micron technologies. And we, we bought a gold stream out of bankruptcy in Boise, Idaho. And we grew the gyms to five locations, 40,000 members. And you know, him being the CEO of a fortune 500 company, he expected me to run the gyms accordingly mm-hmm <affirmative>. And my financials were due by the 17th of every month. He had two days to review them with me on the 21st and he knew exactly what he was looking for and, you know, that, that time he probably more than anything on what levers the financial reporting, the acumen. And I don’t know that there was any better training grounds for me than the time I spent with Steve. Gotcha.
Pete Moore: And then you worked out in the gold gyms in, in LA for a while, which is definitely, you know, a hard charging that’s right. You know, probably a little more glitz GL and, you know, fast paced sales process. So talk about, yeah, for
Josh Wheeler: Sure. And I had spent a lot of time with Willie angel or Willie angel when I had the franchises there in Boise and we used to share best practices. And so I knew a lot about them, their culture, their expectations, and we operated very similarly in the markets that I ran and when I had the opportunity to team up with them on the executive team I jumped at it and I, I had a great time there and got along great both with Willie and angel and Brian Morris. And we had a great run a lot of fun and it, it fit my culture and, and the pace. So it was definitely culture that I, that I loved, I enjoyed and I had a good time with.
Pete Moore: Great. So then you and I connected and, you know, had an intro to the, to the top spin guys who, who own Texas family. Yes, sir. You know, going into a you know, becoming the CEO, you know, one, you’re not reporting to anyone else, you know, everyone’s reporting to you, right. Obviously you had a lot of training ground and, you know, this was kind of a natural progression, you know, in your career. Yeah. You know, getting involved with the company, it was, it was entrepreneurial led before private equity, you know, probably needed to add some more clubs in order to create like a real true platform and a, and a corporate overhead staff. So talk to, to us about, you know, how you kind of assessed where the company was when you got involved and what are, you know, the main action steps you took. Sure. You know, right. When you got your sea LUS
Josh Wheeler: There. Yeah. So the, really any market I go into, the first thing, I’ll take a look at really three things, people systems and accountability who are my people do they understand the culture? We’ll take a look at what kind of systems are in place. And then what level of accountability. And so the first thing we did, we did some, one on one, spent time talked a lot about expectations. What are you expecting from me? What’s fair of me to expect from you. Mm-Hmm <affirmative> we took a look at what systems were currently in place and what systems needed to be in place. And then what level of accountability was currently happened to where it needed to go. So one things we talk a lot about is being system to dependent talent enhanced, and not the other way around, I think in a lot of situations you’re dependent on the talent, you lose that talent, you’re starting over and there’s no system to repeat the result. So going into the partnership with topspin here in Dallas, those are the steps we took, met with people had about 30 days of assessment taking a look at who we had where we needed to upgrade and, but this business in place, and then it comes down to execution.
Pete Moore: So, you know, you’ve gone into very fast-paced environments. You’ve got methodically thought about growth. You and I spent some time together recently, so, you know, I, I get a sense for how you look at new opportunities and yep. You know, there’s a methodical way that you’ve come to be. Yeah. You know, so how do you kind of temper your passion and enthusiasm for, Hey, I want to serve more members. Like I want to open up more location at the same time. I got to understand that my systems and my team mean like my business can only grow at a certain pace. And how have you kind of rebalanced your own, like enthusiasm and reality?
Josh Wheeler: Yeah, that’s, that’s a tough one because I’ve got a big appetite and I think a lot of guys in my shoes also have that big appetite and but you can’t grow just to grow. And I think you’ve got to look at opportunistic. So the opportunities there, you got to be able to, to strike and take advantage of it because you don’t want to miss that opportunity. But at the same time, what is the plan? What’s the plan? What’s the strategy? Are we currently hitting plan? And if we’re not, it’s going to be very difficult to go back to the well to ask mm-hmm <affirmative>. But if we’re staying at plan or ahead of plan and we’re continuing on our pace you need to run the play, you continue to check the box and make sure you’re ready for those opportunities and always looking. Yeah. But I think you got to be real careful in growing just to grow. Yeah.
Pete Moore: So, you know, as you drive through north Texas or north Dallas you know, it’s like McMansion row or like these new, like 600 0 600, you know, houses popping up there under, up the next four months. Right. So how do you think about, you know, defending your turf at the same time, you know, saying, all right, look if eSport or LA fitness or 24 or so whoever goes into like this market here, you, I’m not going to own every community, but I want to own key communities that I’m willing to pay up for leases mm-hmm <affirmative> because I know that that is going to be the next mean on me. Yep. But that is like the next power center. So how do you think about, you know, when you go to a board meeting and say, right, here’s my ideas. And like, here’s what it looks like today, but trust me, like, I, I know what, what five years looks like, and, and this is where we need to be. Yeah.
Josh Wheeler: So one of the things we did day one was took all of our existing data and we ran it through a software platform that scored site selection. And with those, we, we compared it to the EBIDA contribution to see okay, which clause we’re producing, what level of EBIDA. And how did that compare on the score on the site selection? And we were able to back in, I could almost predict exactly based on core well level of EBIDA percentage of our total EBIDA was coming from that location. And so we were real quickly able to back into what a great location looks like for us. So we searched the market. We looked at what pockets matched our best locations, our best contributors. What were the top five personas in that area? What’s the 2, 4, 6, 8, 12 minute drive time look like mm-hmm <affirmative>. And then of course, you’re going to look at visibility, accessibility, and parking. If those three things don’t work, the club’s not going to work, but we’ve been able to really do aisle in on exactly what kind of a score works for us. What kind of a location works for us. And it’s, it’s been great. So we’ve been the last few clubs we’ve opened, we’ve been ahead of plan and we’re right on track.
Pete Moore: Let me, let me tangent for a second, because in a number of these site selections software platforms, and we work on a lot of different deals. So when somebody set as, Hey, there’s like 20 clubs that could be put into this market yet they’re selling the data to 10 clubs and it’s not a 200 club market. So how do you kind of say, all right, trust the data. Now I’m going to verify what I think. And I’m not just going to go, you know, you say that there’s 300, you know, cars going past here, but you forgot that there was no way I exit ramp. Yeah, well, that’s,
Josh Wheeler: That’s exactly about, and I think there’s been some mistakes that have been made even in our portfolio with, with selection of sites that that situation you, you can’t get off the freeway to, to get to the site. So once, once the address scores we’ll spend some time, we’ll take a look, we’ll pull into the parking lot. We’ll take, we’ll sit there for an hour, two hours. What does it feel like? How easy is it to get in and out of how easy is it to pull into the parking lot? During prime time, is it on the right hand side on the way home? What does competition look like? Shop the competition. And so you, you, you go through your due diligence process. And one of the things that we want to look is how easy is it going to be, to drive guest traffic? Is it going to be an uphill battle every single day to generate a guest? Or is this going to be something where we can capitalize on the natural guest traffic and use that to leverage even more guest traffic,
Pete Moore: You know, no one’s ever said to me, I got this really location next to a whole foods, you know, and no one said it like trader Joe’s like, oh, that’s, it sucks. You know, like I I’m going to go as far away from there as possible. That’s right. Yeah. So, and it’s one of the funny things, like when I was back at Brockway Moran, which probably right around when you and I first met mm-hmm <affirmative>, you know, we were talking about site selection and plan. I’m like, why don’t you just go like next to every home Depot, they probably did the did figure out like, Hey, there’s, there’s enough people here to, you know, make a 25 million home Depot where you’s probably that could do a three mile hour gold gym. Absolutely. so how important are adjacent tenants and how important going forward, is it to understand your consumer, what they want and where they’re willing to go and who you’re next to that kind of like reframes, like what your brand represents?